Meaning of Ex Pacto Illicito Non Oritur Actio
The maxim "Ex pacto illicito non oritur actio" translates to "No action arises from an illegal agreement".
Context: Principle of Pari Delicto
This maxim is part of the principle of pari delicto, which applies when both parties to an illegal contract or agreement are at fault. It is grounded in general principles of public policy. Courts will not lend their aid to a person whose cause of action arises from an immoral or illegal act.
Effect of the Principle
When the principle of pari delicto applies, the law will not aid either party to the illegal agreement. Neither party can recover what they have given under the contract or demand the performance of the other party's undertaking. The action known as "Accion In Rem Verso", which allows for the recovery of something paid without just cause, does not apply if the pari delicto doctrine applies.
Exceptions to Pari Delicto
The application of the pari delicto principle is not absolute, and there are exceptions allowing recovery. These exceptions apply in certain situations, such as when:
- One party is innocent.
- A debtor pays usurious interest.
- A party repudiates the contract before the illegal purpose is achieved, if public interest is subserved.
- An incapacitated party is involved and the interest of justice demands recovery.
- The agreement is merely prohibited (not illegal per se) and the prohibition protects the plaintiff, enhancing public policy.
- Labor laws regarding minimum wage or maximum hours are violated.
- Price ceilings are violated.